Nervous investors tend to look for safe havens for their money, especially when the markets are volatile. There's one option that may not only hold your money, but provide a good long-term investment, as well.
That object? The Hermès Birkin bag, a status symbol that's hung from the arms of celebrities ranging from Victoria Beckham to Lady Gaga. According to retail site BagHunter, the average value of a Birkin bag has provided an annual average return of 14.2 percent since 1980, compared with the annual real return of 8.7 percent for the S&P 500 and -1.5 percent for gold.
Whatever you think of the Birkin bag -- the actress after whom it's named complained that they were "bloody heavy" -- the luxury item has another thing going for it: its value has fluctuated, but never into negative territory, unlike gold or stocks, according to BagHunter's calculations. But before the average investor rushes out to try to secure a Birkin bag, it's important to realize that the handbags are neither for the faint of bank account or biceps.
The capacious bags aren't all that easy to buy, at least directly from Hermès. The average cost of a new Birkin is $60,000, and they aren't advertised on Hermès' site. They often seem to be out of stock, so fans cultivate sales associates and purchase steady streams of Hermès products to demonstrate that their bank accounts are as hefty as the bag.
Should that seem unappealing, there's a second route: buying a used Birkin bag (er, sorry, "pre-loved.") There's no lack of such bags on the market, with prices that range from a measly $13,800 up to more than $100,000. Conveniently, BagHunter offers dozens of used Birkin bags for purchase on its site.
Even if one has the assets to buy a Birkin bag, it may be worth considering a few other issues. Birkin bags' value have risen in line with another favorite of the 1 percent: fine art. Paintings and other artwork that have sold at auction have increased by an annual return of 9.6 percent since the late 1960s.
But that doesn't mean that every piece of art -- or Birkin bag -- will hold the same appeal to buyers. There's the issue of taste and style, so Birkin bags in the "wrong" color may end up on the losing end of the sale.
Both art and Hermès bags share another thing in common: they've surged along with the fortunes of the 1 percent. The income of America's wealthiest families have surged more than 200 percent since 1979, while the middle 20 percent has witnessed income gains of a relatively meager 40 percent.
Given that there's little sign that income inequality will shrink any time soon, some may be willing to bet that the 1 percent will continue to grow their assets and income, leading to continuing demand for Birkin bags and artwork.
On the other hand, such investments are purely speculative. The market for Birkin bags is illiquid, and the handbags obviously don't provide any value in and of themselves. Unlike the S&P 500, handbags don't provide dividends or earnings growth.
"As a status symbol for the elite and ultra-rich, the main factor affecting the secondary market for Birkins is desire," according to BagHunter's. "All signs point to that desire remaining as strong throughout 2016 as it has been since the bag was released."
But inside that statement resides a major risk for Birkin bag buyers. Tastes may be hard to predict, but they have one hard-and-fast rule: they always change.